Sweden (krona) SEK 8.4976 8.4388 8.3886 8.2836

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A U.S. company has committed to pay 10 million kronor to a Swedish company in one year. What is the cost (in present value) of covering this liability by buying kronor forward? The Swedish interest rate is 1.2%,

Exchnage rate is in the table 

 

Europe:
Euro
Czech Republic
(koruna)
Hungary (forint)
Poland (zloty)
Russia (ruble)
Sweden (krona)
Forward Rates
Abbreviation Spot Rate 3 Months
EUR or €
1.1758
1.1800
CZK
21.853
21.605
HUF
267.28
265.703
PLN
3.5773
3.5691
RUB
58.879
59.453
SEK
8.4976
8.4388
6 Months
1.1845
21.549
264.438
3.5668
60.205
8.3886
1 Year
1.1916
21.388
261.520
3.5618
61.501
8.2836
Transcribed Image Text:Europe: Euro Czech Republic (koruna) Hungary (forint) Poland (zloty) Russia (ruble) Sweden (krona) Forward Rates Abbreviation Spot Rate 3 Months EUR or € 1.1758 1.1800 CZK 21.853 21.605 HUF 267.28 265.703 PLN 3.5773 3.5691 RUB 58.879 59.453 SEK 8.4976 8.4388 6 Months 1.1845 21.549 264.438 3.5668 60.205 8.3886 1 Year 1.1916 21.388 261.520 3.5618 61.501 8.2836
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